C&D Technologies Reports Second Quarter Fiscal 2010 Results
C&D Technologies, Inc. announced financial results for the fiscal 2010 second quarter, ended July 31, 2009. For the second quarter, the company’s reported revenues rose 11.9% sequentially to $82.4 million, driven by an eight% sequential increase in volumes. In the second quarter of fiscal 2009, revenues were $92.5 million, reflecting the impact of higher commodity costs on revenues.
For the second quarter, the company reported a net loss of $5.6 million or ($0.21) per diluted share compared to a net loss of $9.8 million or ($0.37) per share in the first quarter of the current fiscal year. In the year ago period, the company reported a net loss of $1.4 million or ($0.06) per diluted share. Cash flow from operations for the quarter was $1.9 million.
Results in the current quarter include approximately $800,000 of non-cash interest expense related to the first quarter adoption of new accounting standards governing the accounting for the company’s convertible notes, as well as approximately $500,000 of non-cash tax charges front-end phased based on the company’s full year earnings forecast.
Dr. Jeffrey A. Graves, President and CEO, said, "We achieved solid progress this quarter, generating positive operating cash flow, increasing volumes, and expanding margins, which led to improving bottom line performance for the second consecutive quarter. Having effectively reduced our net loss by nearly half compared to the first quarter, we remain on pace to achieve our goal of profitability in the second half of this year. The sequential top line growth in the second quarter was primarily volume driven, indicative of market share gains as we benefited from traction with our new product introductions and momentum in Asia. Overall volumes in this quarter were up one percent compared to the second quarter a year ago. Margins also showed a strong sequential improvement primarily from elimination of prior period commodity hedge losses, the leverage achieved through additional sales volume, as well as contribution from an improving product mix reflective of an increasing proportion of revenue generated from redesigned products introduced in the last year. We believe these same factors will be the principal contributors to improving margin and earnings performance in the next few quarters. While certain of our markets remain quite soft, particularly the UPS industry, we are encouraged by the stabilization of our end markets this quarter, and remain excited about the growth prospects of our new products, geographic expansion opportunities, and the ability to lever this momentum into better returns for our shareholders through our various productivity and efficiency initiatives."
In the second quarter, gross margins rose to 12.1%, a significant sequential improvement from 7.3% in the first quarter of the current fiscal year. The sequential improvement in gross margins in the quarter is attributable to elimination of commodity hedge losses, an increase in volume and improved product mix. A year ago, the gross margin was 14.5%. Prior year margins benefited from lower tolled lead costs.